Loading judgment…
Facts
The assessee filed an appeal against the order of the CIT(E) rejecting their application for registration under section 12AB and cancelling a prior registration due to misrepresentation. The appeal was filed with a significant delay of 285 days, attributed to misunderstanding and lack of understanding.
Held
The Tribunal condoned the delay, citing a bonafide mistake and reliance on Supreme Court judgments emphasizing that procedural delays should not defeat justice. The Tribunal also noted the assessee's non-compliance and indifference but decided to remand the matter for de novo adjudication.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the matter should be remanded for fresh adjudication after providing an opportunity of being heard.
Sections Cited
12AB, 12A, 12A(1)(ac)(iii), 12A(1)(ac)(i), 12A(1)(ac)(iv)
AI-generated summary — verify with the full judgment below
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
Appellant by : None Respondent by : Shri Biswanath Das (CIT DR) Date of Hearing 22.04.2025 Date of Pronouncement 05.05.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Exemption), Pune [hereinafter referred to as “CIT(E)”] pertaining to order passed u/s. 12AB(1)(b)(ii) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 30.01.2024 for the Assessment Year [A.Y.] 2022-23.
A.Y. 2022-23 Shree Hanuman Seva Mandal 2. The grounds of appeal are as under:- (i) On the facts and circumstances of the case, the Commissioner of Income Tax Exemption, Pune (CIT Exemption, Pune) has erred in rejecting the application for registration u/s 12A r.w.s. 124(1)(ac)(iii) due to want of provisional registration u/s 12AB in form 10AC issued under the provisions of clause (VI) of section 12A(1)(ac) of the Income Tax Act, 1961 (the ‘Act’). (ii) On the facts and circumstances of the case, the CIT Exemption, Pune has erred in cancelling the registration obtained u/s 12A(1)(ac)(i) of the Act stating that the same was obtained by mis-representation of facts and the said registration is not a valid registration ignoring the fact that the copy of registration prior to 1. April 2021 attached to the application for registration in form 10A.
3. It may be stated here at the outset that the Registry pointed out that appeal of the assessee is delayed by 285 days. In this regard, an affidavit from the Trustee requesting condonation of the delay was filed wherein it was inter alia contented that the delay was unintentional and resulted from a lack of understanding. The assessee is committed to complying with tax obligations in a timely manner and fully recognize the significance of adhering to tax regulations and fulfilling the duties promptly. It is stated that the assessee filed another application for renewal of registration ignoring the fact that the order of rejection against the application has already been passed by the CIT(E) on 30.01.2024.It was unaware that it is not required to file any application for renewal of registration since the registration was taken u/s 12A(1)(ac)(i) as regular registration and the provisional registration u/s 4. On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the present appeal was not intentional but due to certain misunderstanding only. Such a bonafide mistake needs to be condoned. In this connection reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We condone the delay which appears to be on account of certain misunderstanding of the provisions as stated in the affidavit which is bonafide.
A.Y. 2022-23 Shree Hanuman Seva Mandal 5. The assessee Trust had made an application in Form no.10AB clause (iii) of section 12A(1)(ac) for registration u/s 12AB of the Act. The ld.CIT(E) called for various details to examine relevant facts regarding genuineness of its activities and compliance to various requirement. Several notices were issued in this regard but none of them were complied with. Even a show-cause notice proposing rejection of the application and cancellation of regular registration u/s 12A dated 07.04.2022 was also not complied which ultimately forced the ld.CIT(E) to pass an ex parte order rejecting its application and cancelling the earlier registration on the ground that the same was obtained on mis- representation of facts.
It may be stated here that even before us neither there was any compliance when the case was called for hearing nor any adjournment letter was submitted. It is observed that the ld.CIT(E) rejected its application solely on the ground of non-appearance. He could not adjudicate the issues involved. However, it is equally true that it is the fundamental duty of the assessee to diligently pursue the proceedings and comply with the notices and proceedings initiated by the Revenue authorities. The framework of the Act and the e-proceedings system rely heavily on the co-operation and active participation of the taxpayer. Despite several notices issued by the CIT(E), no substantive explanation A.Y. 2022-23 Shree Hanuman Seva Mandal was submitted. The failure of the assessee to make any response before the authority concerned reflects gross negligence and an indifference that is unacceptable. The principles of natural justice operate both ways, while the Revenue authorities are required to provide a reasonable opportunity of being heard, the taxpayer is equally obligated to co- operate with the authorities and utilize the opportunities extended. In the present case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference 6.1 In light of the non-compliant attitude of the assessee, levy of cost needs to be evaluated in this case as cost serves as a necessary deterrent to ensure that taxpayers act with due diligence in pursuing their tax cases and respecting the timelines and processes laid down under the law. It also emphasizes the principle that while justice must be ensured, the system cannot cater to indolence or negligence on the part of the assessee.
6.2 However, we are of the considered view that the scales of justice demands that the matter should be verified and revisited at the level of ld. CIT(E) and accordingly, we are of the considered view that the matter should be remanded back to him for de novo adjudication by him while applying the principles of natural justice after affording sufficient opportunity of being heard to the assessee.
A.Y. 2022-23 Shree Hanuman Seva Mandal 6.3 Moreover, considering assessee’s non-compliant and non- co-operative attitude and lack of diligence in pursuing the appeal, we impose a cost of Rs.5,100/- on it. The cost shall be deposited to the credit of the Income Tax Department within 15 days of the receipt of this order and proof of payment shall be submitted before the ld.CIT(A).
In the result, appeal stands allowed for statistical purposes. Order pronounced in the open court on 05.05.2025.